Most Consumers Rarely Shop Around For Mortgages, Study Says
A recent Study Shows Consumers Aren’t Shopping around for Mortgages and that’s mainly due to the poor economic climate. On the other hand, it seems that instead of taking out a home loan, most people are keeping an eye on the latest prices for flat panel TVs. According to the CFPB, it seems that most people just don’t shop enough in order to get their hands on the best mortgage rates that perfectly first their circumstances.
“Plans based on average assumptions are wrong on average.” – Sam L. Savage
In fact, about 50% of those who take out a mortgage for a home are only going to seriously consider a single broker or lender before they go ahead and get a loan.
The Main Findings Of The CFPB Survey
1. Before applying for a loan, about 50% of consumers fail to shop around.
2. 3 out of 4 consumers are only going to apply with a single broker or lender.
3. Most people get their information from lenders or brokers and they usually have a stake in the outcome.
4. Borrowers who are more likely to shop are those that prioritize the terms of a loan instead of the lender’s characteristics.
5. The probability of shopping around is double for informed consumers.
Getting The Best Mortgage Options Out There
Buyers who want to take advantage of the best mortgage options out there should certainly speak to an expert. The best way to find one such expert is through referrals from friends or maybe a real estate agent the borrower trusts. However, before approaching a lender, there are quite a few things to keep in mind, including:
1. The down payment amount you can consider for the loan while at the same time maintaining 6 months of reserves in the bank.
2. When to shop for a mortgage.
3. The amount of time you plan on living in the house. If you plan on moving in 5 years, a 5-year ARM is the way to go. On the other hand, if you want to stay in your home indefinitely, a thirty-year fixed rate mortgage is a better choice.
4. A monthly payment that you can comfortably handle, while contributing to retirement and savings plans and paying other variable and fixed expenses.
Be Aware Of What You’re Signing Up For
This is very important since 1 in 7 people who take out a mortgage have no idea what their mortgage rate is or aren’t too confident. By keeping these tips in mind, you’ll eventually be able to take out the best and most appropriate mortgage for your circumstances.